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June 23, 2006

AirFone Will Shut Down

AirFone will halt its service by the end of the year: My informed speculation of two days ago turned out true. Verizon said its AirFone service would halt operations by the end of the year in commercial flights (about 1,000), while continuing government and general aviation operations (about 3,400 planes). There's a possibility that they could sell the operations, but as reporter Ken Belson notes, Verizon's license to operate AirFone ends in 2010--and the FCC said in multiple orders that this is a non-renewable license--and they have two years to redesign their use of spectrum to be compatible with the auction held recently for air-ground spectrum.

Verizon dropped out early in the bidding for the more important 3 MHz license in the 800 MHz band. AirCell ultimately won that license, and JetBlue's LiveTV division acquired the slimmer 1 MHz rights. Verizon will still have to redeploy service on 3,400 planes in a sharing relationship with JetBlue. The corporate and government business must be lucrative enough to be worth spending tens of millions of dollars in retrofitting for a few years of additional operations.

Look for empty spots on seat backs in the near future as Verizon works with airlines to remove phones.